- Stock Futures Jump, Dollar Gains on Tariff Ruling: Markets Wrap
US assets got a boost Thursday after a vast majority of President Donald Trump’s global tariffs were deemed
illegal and blocked by the US trade court. Upbeat earnings from Nvidia Corp. also lifted investor sentiment.
Contracts for the S&P 500 and Nasdaq 100 gained 1.6% and 2% after the ruling, which the Trump administration
will appeal. Asian shares gained 0.7%, with Japanese and South Korean stocks rising 1.7%. The yen weakened
and the dollar strengthened, with a gauge of the greenback rising to the highest level in more than a week. The
yield on the 10-year US Treasuries rose 2 basis points. - Dow closes more than 200 points lower Wednesday ahead of Nvidia earnings
Stocks slipped on Wednesday as investors parsed the latest earnings reports and Federal Reserve meeting
minutes while awaiting Nvidia’s quarterly figures. The S&P 500 slid 0.56% to end at 5,888.55, while the Nasdaq
Composite shed 0.51% and settled at 19,100.94. The Dow Jones Industrial Average fell 244.95 points, or 0.58%,
and closed at 42,098.70. - Oil prices climb as U.S. court blocks Trump tariffs
Oil prices rose on Thursday after a U.S. court blocked President Donald Trump’s tariffs from taking effect, while
the market was watching out for potential new U.S. sanctions curbing Russian crude flows and an OPEC+
decision on hiking output in July. Brent crude futures climbed 81 cents, or 1.25%, to $65.71 a barrel. U.S. West
Texas Intermediate crude advanced by 83 cents, or 1.34%, to $62.62 a barrel at 0102 GMT. A U.S. trade court
on Wednesday ruled that Trump overstepped his authority by imposing across-the-board tariffs on imports
from nations that sell more to the United States than they buy. The ruling buoyed risk appetite
across global markets which have been on edge about the impact of the levies on economic growth, but
analysts said the relief may only be temporary given the administration has said it will appeal. “But for now,
investors get a breather from the economic uncertainty they love to loathe,” said Matt Simpson, an analyst at
City Index in Brisbane. On the supply front, there are concerns about potential new sanctions on Russian crude.
At the same time, the Organization of the Petroleum Exporting Countries and allies, together called OPEC+,
could agree on Saturday to accelerate their oil production hikes in July. With Russian oil so far overall showing
relative resistance to the sanctions, imposed over Moscow’s war on Ukraine, “it is hard to be convinced that
any new U.S. sanctions on Russia will meaningfully dent Russia’s oil exports,” Commonwealth Bank of Australia
analyst Vivek Dhar said in a note. Adding to supply risks, Chevron has terminated its oil production and a
number of other activities in Venezuela, after its key license was revoked by U.S. President Donald Trump’s
government in March. Venezuela in April cancelled cargoes scheduled to Chevron citing payment uncertainties
related to U.S. sanctions. Chevron was exporting 290,000 barrels per day (bpd) of Venezuelan oil or over a third
of the country’s total before that. - Gold hits over one-week low after US court blocks Trump’s tariffs
Gold touched a more than one-week low on Thursday after a U.S. federal court blocked President Donald
Trump’s “Liberation Day” tariffs, dampening the metal’s safe-haven allure, while a robust dollar further
pressured the bullion. Spot gold was down 0.7% at $3,268 an ounce, as of 0242 GMT, after hitting its lowest
since May 20. U.S. gold futures dropped 0.1% to $3,265. A U.S. trade court on Wednesday halted the
enforcement of Trump’s tariffs, ruling the president exceeded his authority by imposing universal duties on
imports from nations with a trade surplus with the United States. “This was obviously the most important news
driver and looking at the broad, dollar sort of rallied on that and obviously helped push gold lower,” said
Nicholas Frappell, global head of institutional markets at ABC Refinery. On April 2, Trump had levied “reciprocal
tariffs” on multiple countries, stoking fears of a global recession. However, many of those country-specific
tariffs were paused a week later. Following the trade court’s ruling, the U.S. dollar index rallied making
greenback-priced gold more expensive, with Wall Street futures and Asian equities also climbing. Meanwhile,
the Trump administration filed a notice of appeal, challenging the court’s authority and signaling a potential
escalation to the Supreme Court if necessary. But the gold market is still bullish as “longer term outlook
suggests a weaker dollar and there’s still likely to be some inflationary pressures near term,” Frappell said. - Federal trade court strikes down Trump’s reciprocal tariffs
A federal trade court struck down President Donald Trump’s worldwide reciprocal tariffs and ordered the
administration to stop collecting them. A three-judge panel on the Court of International Trade said Trump
exceeded “any authority granted” by the International Emergency Economic Powers Act in imposing the import
levies. In halting tariffs Trump ordered on Canada, Mexico, and China to combat drug trafficking, the judges
said they “fail because they do not deal with the threats set forth in those orders.” The government
immediately appealed the ruling to the U.S. Court of Appeals for the Federal Circuit. - U.S. says it will start revoking visas for Chinese students
U.S. Secretary of State Marco Rubio announced on Wednesday the United States will start “aggressively”
revoking visas of Chinese students, including those with connections to the Chinese Communist Party or
studying in critical fields. If applied to a broad segment of the hundreds of thousands of Chinese university
students in the United States, the move could disrupt a major source of income for American schools and a
crucial pipeline of talent for U.S. technology companies. President Donald Trump’s administration has sought
to ramp up deportations and revoke student visas as part of wide-ranging efforts to fulfill its hardline
immigration agenda. In a statement, Rubio said the State Department will also revise visa criteria to enhance
scrutiny of all future visa applications from China and Hong Kong. “The U.S. State Department will work with
the Department of Homeland Security to aggressively revoke visas for Chinese students,” he said. The Chinese
Embassy in Washington did not immediately respond to a request for comment. China’s foreign ministry
previously vowed to “firmly safeguard the legitimate rights and interests” of its students overseas, following
the Trump administration’s move to revoke Harvard University’s ability to enroll foreign students, many of
whom are Chinese. China is also at the epicenter of Trump’s global trade war that has roiled financial markets,
upended supply chains and fueled risks of a sharp worldwide economic downturn. The decision to cancel
Chinese student visas comes despite a recent pause in the U.S.-China trade dispute. International students –
India and China together accounting for 54% of them – contributed more than $50 billion to the U.S. economy
in 2023, according to the U.S. Department of Commerce. - German defense firm Renk looks to struggling auto sector for new talent as it scales up
Tank parts maker Renk is eyeing up talent from the auto sector as it races to scale up and fuel growth in the
wake of rising geopolitical tensions and soaring military spending. Earlier this year Germany passed a historic
fiscal package that enabled a steep increase in the defense spending capabilities of Europe’s largest economy.
The 27-member state bloc is scaling up its defense efforts amid the war in Ukraine and the increasingly strained
transatlantic security partnership. Renk, a global leader in creating gear boxes for tanks, is among the defense
firms that has seen its stock rally on the back of increased military spending. Its share price rose over 300% so
far this year and its order book jumped 164% to 549 million euros ($622.3 million) in the first quarter. To keep
pace with the soaring demand, defense companies like Renk, Hensoldt, Rheinmetall are increasingly
collaborating with the automotive industry. It’s a sector which historically has been one of Germany’s most
important economic pillars, but has been facing major difficulties due to the country’s sluggish economy,
increased competition from China and U.S. tariffs. For Renk, this cross-industry collaboration has mainly
consisted of hiring workers from the automotive industry, capitalizing on CEO Alexander Sagel and Chief
Operating Officer Emmerich Schiller’s previous experience working in this sector. Sagel has previously held
positions at Rheinmetall and Daimler, which has since been renamed to Mercedes-Benz Group AG, while
Schiller has worked in various management roles at Mercedes-AMG GmbH. - Japan’s bond market ignites fears of outflows from U.S., carry trade unwind and market turmoil
Japan’s bond market is igniting fears of capital flight from the U.S. and a carry trade unwind as long-dated yields
hover near record highs. Yields resumed their move higher Wednesday as demand for 40-year government
bonds reportedly dropped to its weakest level since July last year, according to Reuters’ calculations, hovering
near record highs hit last week. Japan’s 40-year government bonds yields hit an all-time high of 3.689%
Thursday and were last trading at 3.318% — almost 70 basis points higher so far this year. Yields on 30-year
government debt are up more than 60 basis points this year at 2.914%, also not too far from all-time highs,
while for 20-year debt they are up over 50 basis points. - Bitcoin ETFs Pull In $9 Billion as Investors Ditch Gold Holdings
A divergence is emerging in US exchange-traded funds as investors move from gold to its so-called digital
counterpart, Bitcoin. Over the past five weeks, US Bitcoin ETFs have attracted more than $9 billion in inflows,
led by BlackRock Inc.‘s iShares Bitcoin Trust ETF (IBIT). Meanwhile, gold-backed funds have suffered outflows
exceeding $2.8 billion over the same period, according to data compiled by Bloomberg News. - Nvidia beats on earnings and revenue as data center sales jump 73%
Nvidia reported better-than-expected earnings and revenue on Wednesday, as the company’s booming data
center business recorded year-over-year growth of 73%. The stock rose about 6% in extended trading. Here’s
how the company did, compared with estimates from analysts polled by LSEG: Earnings per share: 96 cents
adjusted vs. 93 cents expected; Revenue: $44.06 billion vs. $43.31 billion expected. Nvidia said it expects about
$45 billion in sales in the current quarter, versus LSEG estimates of $45.9 billion in sales in the July quarter. The
company said its guidance would have been about $8 billion higher except for lost sales from a recent export
restriction on its China-bound H20 chips. During the quarter, the U.S. government informed Nvidia that its
previously approved H20 processor for China would require an export license. Nvidia said it incurred $4.5 billion
in charges related to excess inventory for the chip, and would have recorded $2.5 billion in extra sales if the
chip hadn’t been restricted. Nvidia said its gross margin of 61% for the quarter would have been 71.3% if not
for the China-related charge. Nvidia CEO Jensen Huang told investors on an earnings call that the $50 billion
market in China for AI chips is “effectively closed to U.S. industry.” “The H20 export ban ended our Hopper
data center business in China,” Huang said. Despite the political tension, Nvidia’s report shows the company is
continuing to grow aggressively, powered by demand for its artificial intelligence chips, which are used to build
and deploy applications like OpenAI’s ChatGPT. “Global demand for Nvidia’s AI infrastructure is incredibly
strong,” said Huang in a statement. Net income increased 26% to $18.8 billion, or 76 cents per share, from
$14.9 billion, or 60 cents per share, a year earlier. Based on extended trading, Nvidia shares are now less than
5% below their record high reached in January and are at their highest in four months. Revenue rose 69% in
the quarter from $26 billion a year earlier. Sales in the company’s data center division, which includes AI chips
and related parts, grew 73% on an annual basis to $39.1 billion, accounting for 88% of total revenue. Nvidia
said large cloud providers made up just under half the data center unit’s revenue, and $5 billion in sales were
for the company’s networking products, which are used to connect scores of Nvidia chips for AI research. - China and tariffs have wiped off $130 billion from critical chip firm ASML since peak value
More than $130 billion of value has been wiped off of ASML in under a year amid restrictions on exports to
China and U.S. tariff uncertainty. Shares of ASML, which is seen as a critical cog in the semiconductor supply
chain, hit a record high of over 1,000 euros a piece in July last year for a market capitalization of $429.5 billion,
according to data from S&P Capital IQ. That fell to just under $297 billion at the Tuesday close price.
Semiconductor stocks have been volatile since last year due to tightening U.S. chip export restrictions to China
and U.S. President Donald Trump’s threat of tariffs on the sector since he took office. ASML and other European
semiconductor firms have felt the heat. - Macy’s cuts annual profit forecast as tariffs loom over consumer demand
Macy’s cut its annual profit forecast on Wednesday as the top U.S. department store operator navigates tariff
induced uncertainty and signaled early discounts on its spring collection to better manage its stock.
Department store chains have consistently lost market share to cheaper products from off-price and big-box
players and competition will likely intensify this year with inflation expected to jump following the Trump
administration’s tariffs. Several firms have withdrawn or lowered their revenue and profit targets for the year,
and retailers, in particular, are preparing for a significant impact on their supply chain costs, as well as on
demand from the sweeping duties. “(Higher) pricing is working its way into the system slowly… That’s why we
have taken a more cautious approach to our outlook for the year,” CEO Tony Spring said on a post-earnings
call. Macy’s (NYSE:M) was increasing prices selectively to soften the hit to margins from tariffs, he said. The
company expects 2025 adjusted profit per share to be between $1.60 and $2.00, compared with the between
$2.05 and $2.25 forecast earlier. “Management did not pull F25 guidance as others have done (which is a
positive),” analysts at Citi wrote in a note. Its shares were last up 1% in volatile morning trading. They have lost
about 28% of their value this year as of last close. Macy’s beat first-quarter estimates and maintained its annual
net sales forecast of $21 billion to $21.4 billion, as Spring’s turnaround efforts lifted performance at remodeled
banner stores. - Abercrombie shares soar as strong demand drives first-quarter beat
Abercrombie & Fitch’s shares surged 15% on Wednesday after it posted better-than-expected first-quarter
results and forecast strong annual sales as the apparel retailer’s move to introduce fresh styles such as printed
jeans and dresses helped draw more shoppers. Shares of the company, which has been rattled by U.S. President
Donald Trump’s erratic tariff policy moves, jumped to $102 after losing nearly half of their value so far this
year. The stock was trading above $100 last in March. The company’s comparable sales in Hollister brand
jumped 23% from a year ago, as its vintage tees and denim collections resonated with younger customers.
Abercrombie CEO Fran Horowitz said that strength in fleece, jeans and skirts helped drive traffic in the quarter
and expects to continue to ramp marketing through the crucial summer season. However, the company cut its
annual profit forecast amid expectation of uneven demand due to tariffs. Abercrombie now expects annual
net income per share in the range of $9.50 to $10.50, compared with prior forecast of $10.40 to $11.40 per
share. It targets annual net sales growth between 3% and 6%, compared with a previous range of a 3% to 5%,
and also plans to repurchase $400 million of its stock for the full year. Abercrombie’s sales forecast and its
decision to stand by its store expansion strategy shows that it is confident in its ability to draw shoppers even
amid uncertainty, said Rachel Wolff, analyst at eMarketer. - L’Oreal fell 1.9% after JPMorgan (underweight) put the cosmetics stock on “negative catalyst watch”
ahead of 2Q results, saying sales may disappoint
“We believe the Beauty market is decelerating further, dragged down by waning demand in the US and
Western Europe, while China may only improve modestly,” writes analyst Celine Pannuti. Flags a deceleration
of the fragrance boom and increasing competition from dupes, local players and international players. JPM
expects 2Q LFL to decelerate to 0.7% versus 3.5% in 1Q; says that’s below consensus expectations of 2.7%.
Notes valuation premium versus EU sector of 25%-30% compared with 20% historical average. - Salesforce Inc. raised its annual sales forecast, suggesting that its AI agent product is on a path to
contribute significant revenue
The software company said revenue will be $41 billion to $41.3 billion in the year ending in January 2026,
compared with an earlier forecast of $40.5 billion to $40.9 billion. Salesforce launched its “Agentforce” product
in October and is aiming for broad adoption among its customers. The company said that it closed more than
4,000 paid deals for the product. Earlier this week, the company announced it would spend about $8 billion to
buy Informatica, which focuses on organizing and managing data in the cloud. AI implementation has been
slowed in large companies because information is scattered and needs to be pulled together from many areas.
“Informatica is a data power play,” Robin Washington, Salesforce chief financial and operating officer, said.
Along with other data-focused Salesforce products, Informatica will help customers implement AI tools sooner,
she said. Annual recurring revenue for Salesforce’s division that includes data organization and AI crossed $1
billion in the period ended April 30. That’s up from $900 million in the previous quarter and “points to
consistent AI demand,” Bloomberg Intelligence wrote. The company’s shares gained about 1.3% in afterhours
trading. Fiscal first-quarter revenue increased about 8% to $9.8 billion. Remaining performance obligations, a
measure of bookings, were $60.9 billion. Profit, excluding some items, was $2.58 per share. All those metrics
exceeded Wall Street estimates. - HP Inc. dropped 7.8% in afterhours trading after the company’s profit outlook fell short of estimates and
it cut the annual earnings forecast, pointing toward a weaker economy and continuing costs from US tariffs
on goods from China
Earnings, excluding some items, will be 68 cents to 80 cents a share in the period ending in July, the maker of
computers and printers said. Analysts, on average, estimated 91 cents. Fiscal second-quarter profit was 71
cents a share, compared with the average estimate of 81 cents. Profit was dented by 12 cents from the impact
related to tariffs and HP’s spending to move manufacturing out of China, said Chief Financial Officer Karen
Parkhill. Demand for computers is being hurt by rising economic uncertainly tied to tariffs, the impact of which
was greater than the company expected when it gave its earlier forecast, Chief Executive Officer Enrique
Lores said. The company is boosting production in Vietnam, Thailand, India, Mexico and the US. By the end of
June, almost all products sold in North America will be made outside of China, he said. Still, the PC market will
grow at a more moderate pace because of the slowing economy. HP reduced its annual adjusted profit outlook
to $3 to $3.30 a share from a previous forecast of $3.45 to $3.75 a share. In the quarter ended April 30, revenue
increased 3.3% to $13.2 billion, slightly above the average estimate of $13.1 billion.
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